Law:

Section:

(a) Income-tax Act (XI of 1922), S. 66-A(2)-Application for certificate to appeal to Supreme Court pending in High Court ­Applicant, by way of abundant caution, at the same time petitioning Supreme Court for leave to appeal in terms of Art. 58(3), Constitution of Pakistan (1962)-High Court granting the requisite certificate-Petition before Supreme Court dismissed as infructuous. A petition for special leave was filed although an application for a certificate under section 66-A(2), Income-tax Act, 1922 was then pending in the High Court. The petition came up for hearing before the Supreme Court but was directed to be kept with the record of the appeal as it was found that in the meantime the High Court had already granted a certificate. The appeal was later admitted by the Supreme Court. The petition for special leave, it was said, was filed out of abundant caution; as it was apprehended that in view of the provisions of Article 58 of the Constitution (1962) the High Court might decline to grant the certificate. The certificate having, however, been granted the petition had become infructuous and was accordingly dismissed. (b) Income-tax Act (XI of 1922), S. 15-B(1), (3)-"Fixed deposits" not earmarked or used for any purpose-Not "capital employed in the undertaking"-" Capital" must be one "actively" employed-Computation of "capital" must be in accordance with rules made by Central Board of Revenue-Interpretation of statutes-No words to be treated as surplusage-Provisions granting exemptions or privileges to be construed strictly against those granted such privilege. The question of law referred to the High Court was as follows:- "Whether, in the facts and circumstances of the case, the Tribunal was justified in holding that the amounts covered by the fixed deposits or any part thereof (to the extent of the assessee's alleged commitments) was not `capital employed' in the assessee's industrial undertaking within the meaning of section 15-B of the Income-tax Act, read with rule 7 of the Income-tax (Computation of Capital of Industrial Undertakings) Rules, 1948?" Held, that the admitted position is that the fixed deposits were not earmarked for any purpose and were…

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